Property Market 2020

stinger31

Hubertj wrote: »

Sounds prudent by banks given the uncertainty in the economy. Don’t get too excited and wee yourself.

hahaha even you would have to agree that a big drop looks ominous

Mic 1972

rosmoke wrote: »

What would be the point to work from home if viewings are not happening?

There are all kind of inquires about properties that need handling by the EA, not only viewings

Hubertj

stinger31 wrote: »

hahaha even you would have to agree that a big drop looks ominous

I haven’t got a clue how much prices will drop by but clearly they will be double digits - would you not consider 10% significant? I asked yesterday what does 15% look like - that would bring us back to about 2015 prices.
Im sticking with my 185% prediction.

rosmoke

Mic 1972 wrote: »

There are all kind of inquires about properties that need handling by the EA, not only viewings

And how do you expect salaries to be paid if sales are not happening?

Mic 1972

rosmoke wrote: »

And how do you expect salaries to be paid if sales are not happening?

Nonsense
Estate Agencies haven't shut down. You may have inquiries about a property before you decide to veiw it

Villa05

Hubertj wrote:

Devil will be in the detail to ensure it works and is fair to all people. It can’t just be done to pander to the lefty losers. Also how many people will vote for this in a referendum if it permanently impacts the value of their own house?

Fair point, it may be that gov are calculative on this and can go back and say we tried to improve affordability but the people rejected it and then carry on as before.

The lobbyists would have enough ammo and funding to defeat the proposal. The don't knows also have tendency to vote no when un decided

80% tax on newly rezoned land plus an effective use it or loose it tax on existing development land would be a far better option and just requires the will and stroke of a pen

rosmoke

Mic 1972 wrote: »

Nonsense
Estate Agencies haven't shut down. You may have inquiries about a property before you decide to veiw it

That's your problem in a health crisis.
Viewings are not happening so you can inquire later.

Ozark707

stinger31 wrote: »

hahaha even you would have to agree that a big drop looks ominous

If it is 10% on already Sale Agreed properties would it be expected that for current places not gone SA they could have to drop by more than 10%?

There are loads of places which were on the market for >6 months so were probably due a price cut even before Covid appeared. I think 10% is the minimum people should be looking now for off the asking.

Dwarf.Shortage

I don't know that the loss of exemptions is the end of the world for buyers in the face of a drop. If we take a stock example of someone with a well paid job or even a couple earning €75,000 who've managed to squirrel away €50,000.

Pre Covid, bank gives exemption and agrees to lend 4.5x, gives a budget of €387,500
Post Covid bank says no, belts are being tightened you can have 3.5x, budget now €312,500

If we see a 15% decline the €387,500 house will only be €330,000, if the decline hits 20% the above notional buyer will still be able to afford the same house even having lost their exemption.

masculinist

Pivot Eoin wrote: »

It really depends. Maturing Families (With kids entering their teens) could easily be looking to upsize from say 3 beds to a big 4 bed, and with a market drop of say 15%, the gap in prices also drops by 15% so it makes it an excellent time to buy and open up a 3 bed onto the market for a FTB and the seller doesn't care about the drop in valuation.

So many variables.

Large families are a thing of the past.

If your kids are in their teens and all your family memories are in a 3 bed house you're not going to risk all you have on an extra bedroom when you know its only 5 years until they will be in college etc . At most you'd build an extension to get an extra room.

stinger31

Dwarf.Shortage wrote: »

I don't know that the loss of exemptions is the end of the world for buyers in the face of a drop. If we take a stock example of someone with a well paid job or even a couple earning €75,000 who've managed to squirrel away €50,000.

Pre Covid, bank gives exemption and agrees to lend 4.5x, gives a budget of €387,500
Post Covid bank says no, belts are being tightened you can have 3.5x, budget now €312,500

If we see a 15% decline the €387,500 house will only be €330,000, if the decline hits 20% the above notional buyer will still be able to afford the same house even having lost their exemption.

Yeah but what about the pay cuts to john and mary? or the fact Mary has lost her job? or the fact that some banks aren't even offering anywhere near 3.5 times anymore(look up BOI and UB offering a fraction of the 3.5)? and other banks are only looking at people with huge deposits?

Dylan94

stinger31 wrote: »

the fact that some banks aren't even offering anywhere near 3.5 times anymore(look up BOI and UB offering a fraction of the 3.5)? and other banks are only looking at people with huge deposits?

Where are you getting this information from? I was only talking to a broker two days ago who said he could either get me a 95% mortgage or 4.25+ exemption

cunnifferous

td2008 wrote: »

Surely a mistake :eek: even Dublin doesn't have anything as overpriced that I've seen

Its not a mistake unfortunately!

stinger31

Dylan94 wrote: »

Where are you getting this information from? I was only talking to a broker two days ago who said he could either get me a 95% mortgage or 4.25+ exemption

Have a look at their websites and do the mortgage calculator

Dwarf.Shortage

stinger31 wrote: »

Yeah but what about the pay cuts to john and mary? or the fact Mary has lost her job? or the fact that some banks aren't even offering anywhere near 3.5 times anymore(look up BOI and UB offering a fraction of the 3.5)? and other banks are only looking at people with huge deposits?

I said it will suit buyers, if Mary loses her job she's no longer a buyer unfortunately.

My point is that the loss of exemptions accompanied by a drop in prices will be to the advantage of a lot of people. Namely those with secure relatively Covid proof incomes.

Of course there are others who will see cuts in their income and job loses I don't dispute that. But for those who don't there is a big opportunity to end up in the same house with a materially lower mortgage over their heads.

dor843088

So if the banks have already started giving valuations of properties a 10% haircut then someone looking for a margin of safety should really be making an offer of say 20% - 30% below asking and sticking to it . Property just became the highest risk game in town. The consequences of getting in just before a nose dive could be a financial catastrophe.

Dwarf.Shortage

What happens if the bank valuer does go under the sale price? What do they use to determine the 10%?

If I'm lined up to buy a 300k house 90% LTV and the bank come back with a value of 280k are they going to say the LTV is now (27/28) ~ 96.4% and hence they can't lend the money?

stinger31

Dwarf.Shortage wrote: »

I said it will suit buyers, if Mary loses her job she's no longer a buyer unfortunately.

My point is that the loss of exemptions accompanied by a drop in prices will be to the advantage of a lot of people. Namely those with secure relatively Covid proof incomes.

Of course there are others who will see cuts in their income and job loses I don't dispute that. But for those who don't there is a big opportunity to end up in the same house with a materially lower mortgage over their heads.

Sorry Dwarf, i totally agree with you. there will be great opportunities for a small group

Mic 1972

rosmoke wrote: »

That's your problem in a health crisis.
Viewings are not happening so you can inquire later.

Not sure you understand what working from home means

dor843088

Dwarf.Shortage wrote: »

What happens if the bank valuer does go under the sale price? What do they use to determine the 10%?

If I'm lined up to buy a 300k house 90% LTV and the bank come back with a value of 280k are they going to say the LTV is now (27/28) ~ 96.4% and hence they can't lend the money?

Banks are certainly not going to indulge stubborn sellers and naive buyers. Their value is what the loan will be based on.

eagle eye

So the general consensus seems to be that if you are in a position like me where the mortgage is only 20% of the price if the house I should pull out?
I'm in the position where I can pull out. I got a letter from my solicitor telling they want want to push back the sale for eight weeks due to covid-19.

Dwarf.Shortage

stinger31 wrote: »

Sorry Dwarf, i totally agree with you. there will be great opportunities for a small group

I don't think the contingent of people with secure jobs who won't see pay cuts off the back of Covid is vanishingly small tbh.

If there's a 20% correction of housing prices there will be plenty of late 20s early 30s people with good jobs who it will suit down to the ground.

Hubertj

dor843088 wrote: »

Banks are certainly not going to indulge stubborn sellers and naive buyers. Their value is what the loan will be based on.

I thought banks have been indulging stubborn sellers since the last crash?

tastyt

Dwarf.Shortage wrote: »

What happens if the bank valuer does go under the sale price? What do they use to determine the 10%?

If I'm lined up to buy a 300k house 90% LTV and the bank come back with a value of 280k are they going to say the LTV is now (27/28) ~ 96.4% and hence they can't lend the money?

The bank would now only lend you 252k instead of 270k , provided your looking for 90 LTV

Dwarf.Shortage

tastyt wrote: »

The bank would now only lend you 252k instead of 270k , provided your looking for 90 LTV

So in the absence of further funds being available to top up the deposit and bridge the shortfall to the sale price, it essentially sinks the entire transaction?

I assume most people are borrowing 90% because they need to and don't have €20k handy to supplement their deposit so this could be a big deal.

The_Conductor

eagle eye wrote: »

So the general consensus seems to be that if you are in a position like me where the mortgage is only 20% of the price if the house I should pull out?
I'm in the position where I can pull out. I got a letter from my solicitor telling they want want to push back the sale for eight weeks due to covid-19.

Its entirely up to you.
You are in an incredibly strong position- both from a borrowing and also, ironically, from a timing perspective.

The fact that the other party want to delay the transaction could be for any of a number of reasons- its impossible to try to double guess them- if you had a clear indication of their motivations- it might assist you in coming to a more clearcut decision.

If you really like the property and intend to live in it long term- go ahead. If you're 'meh' about it- it doesn't really matter to you whether you go ahead or not- or you're actively trying to get an 'out' on this- just walk- you'll have a better idea of whats happening in a few months anyway.

I don't know what I'd do in your situation- because I don't know your or the seller's motivations. Either way- its an unprecedented time to be buying or selling property. Anyone who offers you definite advice on this- is talking out of their hat. No-one knows what is going to happen.

Dylan94

stinger31 wrote: »

Have a look at their websites and do the mortgage calculator

The BOI website is giving 3.5 no matter what figure I put in, if its 200,000, 90,000 or as low as 50,000 per couple.

While the Ulsterbank website is giving x4.0 for a couple on just 50,000.

I'm not saying that banks aren't offering less or cutting exemptions. Just wondering where the info is coming from. I wouldn't imagine those online calculators are accurate anyway? (Or would they be?)

Reversal

Dwarf.Shortage wrote: »

So in the absence of further funds being available to top up the deposit and bridge the shortfall to the sale price, it essentially sinks the entire transaction?

I assume most people are borrowing 90% because they need to and don't have €20k handy to supplement their deposit so this could be a big deal.

Or reality dawns on sellers that they can’t just “hold out for the price they want”. And they reduce the price to match the bank valuation. It’s that or bust.

tastyt

Dwarf.Shortage wrote: »

So in the absence of further funds being available to top up the deposit and bridge the shortfall to the sale price, it essentially sinks the entire transaction?

I assume most people are borrowing 90% because they need to and don't have €20k handy to supplement their deposit so this could be a big deal.

It will sink the transaction if further funds aren’t available, unless the seller wants it sold and is realistic enough to drop the asking price to or closer to the valuers valuation

Edit : as said above

guyfawkes5

Dylan94 wrote: »

The BOI website is giving 3.5 no matter what figure I put in, if its 200,000, 90,000 or as low as 50,000 per couple.

While the Ulsterbank website is giving x4.0 for a couple on just 50,000.

I'm not saying that banks aren't offering less or cutting exemptions. Just wondering where the info is coming from. I wouldn't imagine those online calculators are accurate anyway? (Or would they be?)

From talking with BoI over the phone about my own application, they are putting exemption applications on hold the time being as their ratio of exemptions to non-exemptions in applications is a bit high at the moment.